An Overused Worn Out Cliche

And now for another understatement; we truly are living in unprecedented times
- aren't we? I mean, just when the world appeared to be growing so close -
with the fall of the Berlin Wall, Reunification, the Euro Zone, the emergence
of the Asian Tigers - there seems to be so many headline grabbing events that
highlight our differences, our uneasiness and our distrusts in one another.

This past week the world witnessed the horror and pain that can be inflicted
by nature's full fury. Not only have the U.S.'s southern Gulf States have been
ravaged by the effects of hurricane Katrina, but specifically - the extensive
levee system surrounding New Orleans, Louisiana failed catastrophically. With
Katrina's storm surge first topping and then weakening the levees, this led
to three key breaches to the protective dykes, ultimately owing to the submergence
of much of the City of New Orleans - a dish [bowl] shaped city situated largely
below sea level. Because first responders appeared overwhelmed by the enormity
of the situation, divisive and derisive accusations ranging from racism to
class bigotry have already been leveled
internationally throughout the mainstream press.

To suggest that the resulting flooding of New Orleans hampered
relief efforts, at this point, is an overused worn out cliché -
but no one can deny that the blame game has begun in earnest. At issue is
who knew what and when? Administration officials and emergency response organizations
[FEMA] have made claims that they had no idea - to what extent - the levee
system could or would be breached?

Enter James Lee Witt,
former FEMA director circa 1995, who spoke for the cameras of CNN this past
weekend - informing us that as far back as 1995 FEMA personnel had conducted
drills in New Orleans mocking the inevitable occurrence of just such a situation.
This illumination amounts to an indictment of the current regime in light of cuts
made or redirection
of federal funding in recent years; funding intended to improve and strengthen
the protective levee system around New Orleans.

What all of this shows; to me, is that officialdom was more than adequately
warned of the impending disaster and yet consciously - over the long term - failed
to take adequate and responsible steps to prevent the inevitable. As a
result, when the levees broke, destruction was of an unprecedented scale -
and felt the most amongst those who had the least, the average Jane and Joe.

Jane and Joe....This Bud's For You

I find this callous disregard in the face of very well articulated dire predictions
and warnings eerily familiar. For years, organizations such as GATA have
been sounding alarm bells about the poorly constructed illusory levees supporting
the decaying fiat financial system. Officials at both the Fed and Treasury
have long stood
accused of surreptitiously rigging the price of gold, inflation statistics,
other key economic
indicators, along with the resultant value
of the U.S. dollar as well as interest rates to shore up a critically inadequate
and unstable financial system. All of these actions and decisions have been
made consciously too, despite dire warnings from sound money advocates that
have been branded as 'nonsensical
fringe players - gold bugs'.

For the same number of years, monetary officials have been repeatedly warned
of the susceptibility of the U.S. [and by extension global] economy and financial
system to gathering storm clouds. It has long been postulated that the existence
of the Perfect
Financial Storm, churning at sea, would some day come ashore and have the
U.S. economy in its crosshairs - and could topple and/or wreak systemic havoc
in not just the U.S. economy, but the global financial system.

"If the Gulf is the heart of the oil industry, we've suffered a heart attack."

In addition, the crucial port facilities at the bottle neck/choke point of
the Port of New Orleans have greatly impeded the transshipment and free flow
of many bulk goods on the Mississippi River. Adding this consternation to an
arguably 'already compromised' global energy situation and we have a potent
confluence of events which has already seen dramatic gasoline, natural gas
and distillate price spikes throughout much of the western world.

The big question, in my mind, will the current crop of central planners and
market manipulating interventionists be able to build high enough and strong
enough dykes [rig data and the markets] to stem the prospects of a rising tide
of global hyper inflation? If there is even an ounce of truth to the Matthew
Simmons thesis on Peak Oil coupled with the unfolding events on the U.S.
Gulf coast - then we are most surely staring at the potential for a coming
winter full of energy shortages, just as the levees surrounding New Orleans
were guaranteed to fail if a hurricane struck in excess of Category 3. This
is not rocket science folks, heart attacks typically leave the patient weakened
and at best - highly susceptible to complications or recurrence. Whether or
not news outlets like CNBC want to acknowledge this as such, at the end of
the day, is quite irrelevant. If, as and when this perfect financial storm
finally comes ashore and the illusory financial levees break; those
who have been making claims that the economy and financial system are strong
and resilient are, no doubt, going to be doing their fair share of finger
pointing. They will blame everyone but themselves and the true and deepest
misery will again be shouldered by those who don't understand or are least
equipped to deal with it. The more things change, the more they stay the same
- just another overused worn out cliché.